CALGARY, ALBERTA--(Marketwired - Dec 12, 2014) - In the context of the current commodity market downturn, and its anticipated negative impact on oilfield services in 2015, Savanna Energy Services Corp. ("Savanna" or the "Company") (SVY.TO) is continuing to monitor its 2015 capital program. Savanna has established an initial capital budget for 2015 as follows:
| (Millions of Canadian Dollars) | |
| Estimated maintenance capital for 2015 | 40.0 |
| 2015 estimated capital costs re: Australia Drilling Rig Contract | 40.0 |
Estimated maintenance capital for 2015 includes costs to complete construction of the Company's new drilling and workover facility in Leduc, Alberta that is currently under construction. These costs are budgeted to be almost entirely offset by agreements in principle for the sale of field facilities that will become redundant upon completion of the new facility. The Company is currently evaluating several other non-operational or non-core asset dispositions to further mitigate the net cash capital outflows in 2015 as well. Although these remaining potential dispositions may or may not be completed, Savanna remains keenly focused on closely managing capital program outlays within available cashflow for 2015.
The previously announced, contracted, ultra-heavy AC double rig, and three contracted VELOX AC triple rigs, all targeted for initial field operations in Q1, 2015, remain on track, and on budget. Additionally, the five workover rigs and three flushby units previously announced for Australia will be field-ready in Q1, 2015 as well. All of these rigs are backed by multi-year take-or-pay contracts. These growth initiatives from 2014 should help cushion the overall market activity and price declines anticipated for 2015. Savanna estimates the capital required to complete 2014 growth initiatives will be $25 million during 2015.
While Savanna believes it has outlined a very conservative and disciplined capital program for 2015, the Company does retain capacity for further adjustments to maintenance capital expenditures in the face of lower than expected activity during the year. Savanna will continue to update the market regarding capital program adjustments as greater clarity regarding customer activity, and actual operating levels, become available.
Savanna is a leading North American and Australian contract drilling and oilfield services company providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading aboriginal relationships.
Cautionary Statement Regarding Forward-Looking Information and Statements
Certain statements and information contained in this press release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "might" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to the expectation of when the ultra heavy double and the three VELOX triple drilling rigs are expected to be working in the field in North America and the delivery of three flushby and five workover rigs for Australia.